McKenzie and Tullock point out that money wages are the only form of employee compensation. Labor is paid in many different ways, so regulating one aspect of an economic relationship invites offsets elsewhere. Why is the minimum wage exempt from the Peltzman effect.

A binding law should have the same effect regarding avoidance as rent controls.

Many efforts to avoid the rent control regulation range from diluting housing quality to key money. Watch any American programme set in New York for the inevitable sub-plot on rent controls and housing inspectors and courts.

A remixing of the wage package to a package of cash and non-monetary perks that is less preferred by workers will reduce labour supply rather than reduce labour demand.

Suppose that by law you had to be paid more in cash but RMIT responded by asking you to teach more and publish less. Would that increase your labour supply?

]]>By: kelly liddlehttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-705625
kelly liddleSun, 20 Jan 2013 19:05:30 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-705625Sorry ’bout the use of the word entitlement but it appeared in the story and I am drunk I really mean handout.
]]>By: kelly liddlehttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-705624
kelly liddleSun, 20 Jan 2013 19:02:40 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-705624

Some might want to argue that cash-in-hand contributes to tax evasion. Yes it does, but at this level of income the taxpayer is better off with some evasion than paying the dole.

Sinclair
You might want to have another thought. Why do people get cash in hand is it only to evade tax or to keep other entitlements also. You seem to have some puritan view of the honest thief. I personally view tax evasion slightly differently to stealing from the government but often it is the same thing. So theft (recieving any entitlement) should recieve the harshest penalties if you think that a little tax evasion is ok.

]]>By: Helen Armstronghttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-705071
Helen ArmstrongSun, 20 Jan 2013 00:19:55 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-705071Oh Dear, that was actually two questions, not several.
]]>By: Helen Armstronghttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-705055
Helen ArmstrongSat, 19 Jan 2013 23:41:53 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-705055It annoys me that when we hire foreign workers to work, we have to pay them Super, which they can’t access til they leave the country. When they do access it, the government keeps a portion. So this is back door taxation by the Feds and also deprives Oz of the equivalent super money being spent in the country. In effect we are exporting tax and super to another country for no benefit.

And hardly any of them have a super account when they arrive, despite having worked for several months prior.

And we have to pay them the minimum wage, despite them being useless for the first few months – you have to check all their work (which is pretty straightforward) and constantly be on the alert for safety and mechanical issues such as ‘no, I told you, this vehicle is petrol, not diesel, do not fill it with diesel’, and flat tires and getting lost and many would benefit from a big bolt under the accelerator.

Having said that, across perhaps 50 employees, 3 or 4 really shone and we would have them back in an instant.

So to me this raises several questions. Why does the experienced hand get the same amount as a learner (for say, the first 6 months) and why are we giving backpackers all the entitlements of Oz workers when they will never be utilised in Oz?

]]>By: mundihttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-705012
mundiSat, 19 Jan 2013 21:34:23 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-705012job in USA at an ‘Australian’ restaurant, pay was $3 per hour plus half of the tips (other half to kitchen). could easily do 8 tables per hour, avg tip was about $10-$15 per table. never made less than $30 per hour. 4 hours work on a good night with $150+ table bills could net you $300. they had trouble fjnding workers because people didnt inderstsnd how much could be made on tips, and those that did apply were trashy and spoke and presented poorly. people wouldnt even dress nice for interviews.
]]>By: Mundihttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-705003
MundiSat, 19 Jan 2013 21:04:57 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-705003The whole apprenticeship system is design by the building unions to Minimize the number of workers and maximise hourly pay. In most states you have to pay apprentice rough the government, and its illegal to pay them extra. The wages are from $7 for a first year, which is a joke. A kid out of high school can pick up $20 per hour in casual job with the right penalties.

I still have a hard time explaining how a 4th year app can go from $14 per hour in 4th year, to $50 per hour once they are licensed….

]]>By: Septimushttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-704801
SeptimusSat, 19 Jan 2013 10:24:06 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-704801Millworker
]]>By: Fiskyhttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-704760
FiskySat, 19 Jan 2013 08:14:20 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-704760@Monkey`s Uncle – I’ve often noticed that about the Left. They think getting their comments deleted on a non-Leftist blog is ‘censorship’ but naturally they all support Finkelstein. There is no point talking to them about anything really.
]]>By: Yobbohttp://catallaxyfiles.com/2013/01/18/minimum-wages-cause-unemployment/comment-page-1/#comment-704750
YobboSat, 19 Jan 2013 07:59:34 +0000http://catallaxyfiles.ozblogistan.com.au/?p=38886#comment-704750Apprenticeships are one thing, but I think a lot of Catallaxians forget that there are plenty of shitty, dead end jobs out there that train you for nothing and lead nowhere.

Retail and services are this kind of job. Telling a kid to get one of those jobs is terrible advice.